Brussels, 02/07/2012 (Agence Europe) - The main political parties at the European Parliament have welcomed the decisions taken by the European summit last Thursday and Friday to deal rapidly with the economic crisis, particularly the new powers of the eurozone bailout fund (see EUROPE 10645). MEPs say, however, that this will not be enough in itself to solve the sovereign debt crisis, although it will provide a breathing space.
In a press release, the head of the EPP, Joseph Daul of France, says that the EU27 did the right thing in endorsing the European Commission's growth proposals, which it had been finding difficult to get accepted. The decisions are largely based on existing funding, which will be used to raise further cash for new investment, he added. The head of the S&D Group, Hannes Swoboda of Austria, said: “Social-Democrat leaders' insistence to back fiscal discipline with concrete measures to promote growth and employment made a difference compared to previous summits. This summit has said goodbye to Merkozy. Conservative narrow-mindedness is starting to falter.”
Greens/EFA co-leader Daniel Cohn-Bendit said the growth pact was just a drop in the ocean because it won't provide any new resources or new ideas and genuine stimulus would require a real EU budget and the creation of own resources. The GUE/NGL Group is highly critical. Its leader, Germany's Gabi Zimmer, says that the EU leaders have failed and continue to have blind faith in austerity. Zimmer adds that the funding for the growth pact is too feeble.
EMU. Joseph Daul Daul says the growth stimulus measures are useful, but will not change anything, providing simply a breathing space. He warned that one cannot wait ten years, until 2022, to solve Europe's budget, fiscal and social integration problems.
Hannes Swoboda approves of the measures on debt, interest rates and spreads, pointing out: “Concerning the common European supervision of banks, the European Parliament made the proposal some time ago but it was rejected by member states. The S&D Group is ready to do its utmost to reach decisions quickly”, particularly on new legislation to be unveiled by the Commission after the summer break. He said the EU should seriously consider setting up a redemption fund to pool the excess debt of eurozone nations for 25 years or so: “Such a mutualisation (Ed: pooling) of credits can be combined with individual responsibility of each country to pay back its share of the common credits. This is the only way to beat the crises in the long term.” The EP added an amendment recently to the draft new legislation on the Stability and Growth Pact (see EUROPE 10633), which Swoboda says is the only way of solving crises in the long-term.
Guy Verhofstadt of the ALDE Group welcomed “in particular, the ability for member states in difficulty to access the EFSF/ESM and for direct capital injection into banks. But despite the importance of the measures taken today, have European leaders really grasped the need for more fundamental change? What is urgently needed is not so much the fleshing out of these building blocks but specific legislative proposals from the Commission as soon as possible on all of the four elements - economic, banking, fiscal and political union.”
As far as the Greens are concerned, at the European summit important decisions were taken to prevent the euro's collapse, but much more now needs to be done to solve the crisis. The leaders did not make any suggestions for an economic and fiscal union of the scale needed, regretted Rebecca Harms of Germany, adding that true bank supervision at EU level through greater powers for the ECB is crucial, as long as it is accompanied by genuine democratic scrutiny. Cohn-Bendit said member states must realise that only a federal Europe will provide long-lasting solutions to the crisis, the first step towards which would be a pooling of debt. Belgium's Philippe Lamberts expressed concern about the EFSF/ESM's capacity to do the new work assigned to it unless it gets extra funding or, better, a bank licence so it can access ECB cash.
The GUE/NGL believes the banking union and bailout fund decisions will relieve the pressure on some countries, but the expected benefits will be eroded by austerity-driven national economic policy. Zimmer raised the question of the democratic legitimacy of boosting EMU, saying that the EP must be at the centre of this. (MB/transl.fl)